R.M.SAHAI, J. - (1.) THE assessee's turnover of glass-sheets was assessed at 7 per cent under S. 3A of U. P. ST Act (as it stood before amendment) treating it as glassware. The appeal and revision were dismissed. An application under S. 11(1) was filed and apart from the question that has been called under S. 11 (4) the assessee wanted to refer one question which is quoted below: "Whether in view of above facts and evidence placed before him the learned Revising Authority was justified in holding that the glass sheets are semi finished or finished goods fall in the category of glass wares." The application was dismissed and it was observed : "I think having regard to clear observation made in the case of our own High Court noted above glass-sheets could not be considered a raw material but being saleable as such fell in the category of finished goods and were liable to tax as glasswares. The law is clear on the point and hence I do not think in respect of the rate of taxability of glass-sheets any law point was involved making reference to High Court desirable." The assessee thereafter moved this Court under S. 11(4) and reiterated the same question. The application was allowed and the Addl. Judge Revision was directed to draw a statement of case only one question namely, "whether in the facts and circumstances of the present case the glass- sheets sold by the assessee would be taxable as glassware under S. 3A of the ST Act as an unclassified item."
(2.) WE have heard Sri K. M. L. Hajela for assessee and Sri V. K. Mehrotra Standing Counsel for the Department. An attempt has been made to challenge the finding of fact recorded by the Addl. Judge (Revisions) that glass-sheets sold by the assessee is not raw material but "was rather a finished product saleable to consumers". It has been urged that this question was only an aspect of the question that has been called by this Court and therefore there was no bar in considering the evidence adduced by the assessee to establish that glass-sheets was not understood as a glassware in the popular sense. He has placed reliance on CIT, Bombay vs. Scindia Steam Now. Co. Ltd. 42 ITR 589 and CIT, Bihar and Orissa vs. S. P. Jain 87 ITR 370. On the other hand Sri Mehrotra has relied on Karnani Properties Ltd. vs. CIT, Bengal 82 ITR 547 and CIT, West Bengal vs. Smt. Ansuiya Devi AIR 1968 S. C. 779. The controversy in CIT vs. Scindia Stema New. Co. Ltd. (supra) was whether an amount of Rs. 9,26,532/-, the difference between the cost price and the written down value was liable to be included in the total income of the Company for the year of asst. yr. 1946-47 The question referred by the Tribunal was "whether the sum of Rs. 9,26,532 was properly included in the assessee Company's income computed for the asst. yr. 1946-47 ? " When the reference came up for hearing in the High Court a new argument based on S. 10(2) (vii) of the IT Act was raised. The objection raised on behalf of the Department that this contention could not be raised for the first time was over-ruled. The question in the circumstances that arose was whether the High Court was justified in permitting the Company to raise the question of law for the first time in the High Court. The Supreme Court after reviewing a number of authorities laid down certain principles and summed up by saying that it is only a question that has been raised before or decided by the Tribunal that could be held to arise out of its order. After laying down these principles it went on to stress that so far as the applicability of S. 10 was concerned, it was only an aspect of the wider question referred by the Tribunal and therefore the High Court did not commit any error in deciding it. The decision does not anywhere lay down that a finding of fact recorded by the Tribunal can be challenged, or it can be urged that it can be considered by the High Court as an aspect of a question which has been referred for its decision. It is well established that a finding recorded by a Tribunal can be challenged only on the ground that it is based on a misreading of evidence or that it is perverse or that it is based on irrelevant or inadmissible evidence. But this is quite different from saying that such a question is inherent in the question of law which has been referred for the decision in this case. The question as referred clearly envisages that the findings as recorded by the Tribunal are correct and the only question that remains to be decided by this Court is whether on the findings the glass-sheets were taxable as unclassified item or were covered by the entry glassware. The other decision reported in CIT, Bihar & Orissa vs. S. P. Jain (supra) also does not, in our opinion, help the assessee. The facts in that case were that the assessee moved an application in High Court for calling three question. The High Court, however, called only question nos. 2 and 3. At the time of the final hearing the question arose whether the findings recorded by the Tribunal could be assailed or not. The High Court took the view that as this question was not called it could not in its advisory jurisdiction go beyond the questions referred to it. The Supreme Court, however, took the view that question no. 1 was covered by questions no. 2 and 3. It was in these circumstance that it permitted the Department to challenge the findings of fact recorded by the Tribunal. The question referred in this case does not in any manner postulate a challenge on the findings of fact recorded by the Judge (Revisions). The decision more in point is the one relied on behalf of the Department reported in Karnani Properties Ltd. vs. CIT, Bengal (supra). It has been held by the Supreme Court that in absence of a question whether the findings were vitiated for any reason, being before the High Court, it has no jurisdiction to go behind or question the statements of fact made by the Tribunal. Similar is the decision in CIT, West Bengal vs. Smt. Anusuiya Devi (supra). In view of what we have stated above we are of opinion that the first submission raised on behalf of the assessee fails. Before leaving this point we would however like to stress that none of the authorities in his case have adverted to the evidence consisting of 11 affidavits filed on behalf of the assessee, by the dealers of Bombay to establish that glass-sheets sold by the assessee was not glassware. The question whether a commodity is a raw material, Semi-finished product or finished product depends on the evidence and on the circumstances of each case. The burden, in a taxing statute is on the Department to establish affirmatively that the turnover of a dealer is taxable. The assessee led evidence to establish that the glass-sheet was not covered by the entry glassware. The authorities should have considered the evidence and recorded a finding after appreciating the same. It appears to us that the authorities thought that the question whether glass sheet is glassware was a pure question of law and therefore without adverting to the material on record they preferred to rely on decision of the Bombay High Court. The supreme Court in at page 382 (supra) sounded a note of caution in the following words : "Whether we adopt the extended view advance by Lord Redcliffe or the view of Lord Simonds, what has to be safeguarded against is that any crystallisation of the views of this Court and its reluctance to interfere with the findings of fact should not make the Tribunal or IT authorities smug in the belief that, as the Courts did not interfere with the findings which form the bed rock upon which the law well be based they can Act on that assumption in finding facts or by their mere ipsi dixit that they are findings of fact wish it to be so assumed irrespective of whether they are suitable in law or on the materials on record."
(3.) WE have no hesitation in saying that the Courts below in this case have denied us the assistance of a proper finding of fact.;